Abstract:
The main objective of this study was to examine determinants of customer loyalty in the case of 11
Abay Bank branches found in Gondar City. Accordingly, the study employed explanatory research,
descriptive research design and mixed approaches. The required data was collected from through
questionnaire from a sample of 360 respondents selected by using simple random sampling technique.
The questionnaire consisted of demographic characteristics of subjects and items on the study variables,
that is, on loyalty and factors affecting it. The questionnaires were distributed to respondents up on
personal contact and collected upon completion by the researcher and data collector. Interviews with
key bank officers was made to support questionnaire data. Statistical analysis using IBM SPSS version
27 statistical software was made on the data. Descriptive statistics like frequency distribution for
demographic characteristics, mean and standard deviation for loyalty as well as inferential statistics
like correlation and multiple regressions were computed. Results of data analysis indicated that the
status of the bank on the eyes of its customers with respect to customer satisfaction, trust, loyalty and
relations, as well as service quality, company image, compliant handling practice, and innovativeness
found to be at moderate level because they rated at 3.73- 3.99 on 5-point likert scale. A high and
significant bivariate correlation of the dependent variable, loyalty with the independent variables was
noted (Pearson r ranges from .618 with customer relation to .753 with service quality). A high and
significant multiple correlation between dependent and independent variables was also observed (R
=.797). The seven independent variables entered in the regression model were found to explain 63.5%
of the variance of customer loyalty to the bank. When their separate effect was examined using their
beta weights, three of the seven independent variables (satisfaction, service quality and innovativeness)
found to be significant predictors of loyalty as opposed to the rest four (trust, attachment/relationship,
compliant handling, and company image). Finally, based on the results obtained, the researcher
recommends the bank to improving service quality, customer satisfaction and innovativeness to attract
new customer and handle the existing one.
